A Guide to Scope 3 Emissions – Value Chain Support

What are ‘Scope 3 Emissions’?

Scope 3 emissions essentially cover emissions from every other source in the value chain, other than Scope 1 and 2. The 15 categories are listed below - get a short video summary on each by clicking on the links under Quick Help.

Often around 80-90% of your emissions come from the supply chain.

You can estimate your scope 3 emissions using financial transaction data from your accounting system and the tools in Sumday - we’ll explain how below.

Scope 3 emissions are divided into 15 categories:

Upstream activities

Purchased Goods and Services

Capital Goods

Fuel and Energy-Related Activities

Upstream Transportation and Distribution

Waste Generated in Operations

Business Travel

Employee Commuting

Upstream Leased Assets

Downstream activities

Downstream Transportation and Distribution

Processing of Sold Products

Use of Sold Products

End-of-life treatment of Sold Products

Downstream Leased Assets

Franchises

Investments

What data do you need to calculate these emissions?

Remember - Sumday is here to help you do this.

Completing a first pass may not be as difficult as you think. All the tools are available - book a kick off to learn more.

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Who can help you collect this data? Some of this can be found in accounting or ERP systems, and some might be data your organisation has never collected before and that’s alright! Just make a start! Often finance teams have a good understanding of where, which function, and who might be best to go to collect this data. ❓If this data isn’t available you can use spend data from your financial transactions to calculate your Scope 3 emissions. The key will be to disclose you’ve chosen this method to calculate Scope 3 emissions as there is more uncertainty associated with using the spend-based method to calculate. This will be part of your answer for the Uncertainty section.

Category	Data	Data Sourcse
Purchased Goods and Services	Start with: Importing transactions for the reporting period from your accounting system. Easily export the details into excel and upload them - ask your accountant for help if you need it or reach out. Enhance this data: Using quantity of goods purchased or hours of service received	Purchase orders, receipts, invoices, contracts Financial transactions for the reporting period which can be easily exported from your accounting system.
Capital Goods	Quantity of goods purchased.	Purchase orders, receipts, invoices, contracts. Fixed asset register.
Fuel and energy-related activities	Amount of fuel used Energy purchased (e.g., kWh of electricity, therms of natural gas)	Invoices / Utility bills Metre reading records Contracts such as PPA (Power Purchase Agreements) Fuel purchase receipts
Transportation and Distribution	Distance and mode of transport Mass or volume of products shipped Site specific fuel and electricity usage and emissions	Invoices Fuel receipts Delivery notes / Transit records
Waste generated in operations	Total waste produced and type e.g. tonne/cubic metre Proportion of this waste being treated by different methods (e.g., percent landfilled, incinerated, recycled)	Utility bills Tracking systems
Business travel	Destination and distance travelled by modes of transport Nights of accommodation Amount of fuel used	Travel agency records Travel providers e.g. airline Reimbursement receipts e.g. Fuel purchased Surveys with staff
Employee commute and WFH	Headcount Days travelled to work and mode of transport Amount of fuel used Number of WFH days Electricity and fuel used, apportioned, from WFH	HR records Surveys with employees
Leased Assets	Type and number of leased assets or proportion of leased area of building Scope 1 and 2 emissions associated with lease	Lease records Utility bills
Processing of sold products	Fuel and energy used related to the site Scope 1 and 2 emissions (e.g. Process and fugitive emissions if applicable) related to the site	Invoices / Utility bills See Scope 1 and 2 for other potential sources
Use of sold products	Total lifetime expected uses of product(s) Quantities of products sold Fuel used/Electricity consumed/Refrigerant leakage per use of product	Sales records / Invoices Product specifications or manuals
End-of-life treatment of sold products	Total mass of sold products and packaging (from point of sale till consumer i.e. includes any packaging that was used to transport) Proportion of this waste being treated by different methods (e.g., percent landfilled, incinerated, recycled)	Sales records / Invoices Product specifications or manuals Tracking systems
Franchises	Emissions franchisee entities Fuel and energy use by facility	Utility bills Rent statements and lease records
Investments	Proportion of share in investment Emissions from portfolio companies	Investment records

How to Calculate Scope 3 Emission in Sumday 🧮

Go to Carbon Accounting in the left hand menu.

Go to Data Entry

Click Import Transactions to import financial transaction data (You might need your accountant to help here), you can either import from Xero or import via CSV upload.

Complete the Carbon Bookkeeping within the Carbon Ledger

Once you’ve done, go to Assessments

Go to Scope 3

Create worksheets within the respective emission categories.

Add consumption data into the table where possible. If you don’t have this data, that’s alright, you can tag the transactions as ‘Spend based’.

Go to Dashboards and take the total number of Scope 3 emissions.

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Tip: We can walk you through this, just reach out here or get your accountant, sustainability or finance team involved.

Benefits of understanding Scope 3 Emissions

✅ Meet Stakeholder expectations and respond with confidence!

✅ Identify the activities contributing the most to your scope 3 emissions

✅ Build a compelling business case for reducing emissions (and potentially $) using this data as a key input

Emission Reduction 📉

Quick Tips 💡

✅ Create a process for gathering consumption data, especially for core business activities (otherwise you’ll always be tied to spend!)

✅ Include questions related to emissions tracking in your vendor selection process, then you can reduce average emissions associated with those purchases

✅ Ask your current suppliers if they also track their emissions and can provide you with more precise emissions for the goods you buy from them

✅ If some of your biggest suppliers cant provide data yet, tell them about the free trial with Sumday and we can get them set up for you

✅ Look into sustainable packaging options if you sell physical goods

✅ If possible, remote work or WFH policies can effectively reduce scope 3 emissions attributable to employee commute

You have access to:

An excel template for preparing a business case for reducing emissions

A tutorial on how to use that template

An shiny example presentation to explain the business case to your own stakeholders

Support from the help desk on how to prepare this case, just reach out here.

Simply go to the Sumday Academy and click on Business Case Templates to find it.

Learn More - For Accountants, Finance and Sustainability Teams

Course Modules 🎓

Check out the Sumday Academy courses for learning modules on Scope 3 emissions:

🧐 Carbon Accounting for Business Course: Chapter 7-9

🌱 Introduction to Carbon Accounting Course: Chapter 5 & 10-16

Standards Guidance 📑

Read GHG Protocol’s Corporate Accounting and Reporting Standard:

Pages 25 and 27

Appendix D (page 94) for common emission sources across industry sectors.

Read GHG Protocol’s Corporate Value Chain (Scope 3) Standard and Scope 3 Calculation Guidance for detailed guidance for each of the 15 categories.